* Australian dollar rises to 1-week high, after slipping
earlier
* Japanese yen falls after reaching six-day low vs dollar
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
(Recasts, updates prices, adds comment and euro zone PMI)
By Olga Cotaga
LONDON, June 23 (Reuters) - The euro jumped to one-week high
following positive economic data on Tuesday, while other
currencies also rose after White House trade adviser Peter
Navarro walked back on his comment that the U.S. trade deal with
China was "over".
The euro was bolstered by French business activity
rebounding more than expected in June, returning to growth after
three months of an unprecedented downturn, as well as data
showing the euro zone downturn eased again this month.
"The positive news ... is that activity is starting to
rebound; the less positive news is that demand is lagging and
remains subdued," said George Buckley, economist at Nomura.
"However, excluding the possibility of a second wave, demand
should also recover, even if at a slower pace, as consumers and
firms' confidence increases."
The euro rose 0.6% to $1.1325, its highest level since June
16 EUR=EBS .
Navarro said on Monday the trade deal "continues in place"
after his earlier remark stoking volatility in markets already
frazzled by the coronavirus pandemic.
He said his "over" comment had been taken "wildly out of
context", while U.S. President Donald Trump said in a tweet the
deal with the China was "fully intact". The Australian dollar rose to a one-week high, having fallen
earlier, and the safe-haven Japanese yen slipped to a six-day
low as a result of Navarro's walk-back.
"We expect limited further fallout, with President Trump
expected to remain committed to the phase one trade deal in the
run up to the election," said Lee Harman, currency analyst at
MUFG.
"However, last night's price action does highlight that the
FX market remains sensitive to trade policy uncertainty. It
remains a potential trigger for higher volatility."
Euro overnight volatility rose to nearly 10%, the highest in
nearly three weeks. EURONO=FN
"There was also a brief flurry of U.S. dollar demand between
2 a.m. and 3 a.m. London time that dragged euro/dollar to a low
of $1.1233, but U.S. dollar strength pored short-lived," Hardman
said.
The wild swings in currencies come as the market is torn
between hopes of economic re-opening in many parts of the world
and signs coronavirus infections are rising in the United
States.
The Australian dollar traded up 0.7% at 0.6950 AUD=D4 ,
after rising to 0.6977, its highest level since June 16. Before
that, it had fallen as much as 0.7%.
The offshore Chinese yuan pared much of its earlier losses
to trade flat at 7.0559 per dollar in the offshore market
CNH=EBS .
The safe-haven Japanese was last neutral at 106.92 against
the greenback JPY=EBS .
Elsewhere, Scandinavian currencies rebounded as well, with
the Norwegian crown rallying more than 1% against the dollar and
by 0.7% versus the euro.
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